Daily Chemical Reaction
Optimistic 2H20 Views Keep Street Expectations Elevated; US PGP Jumps (Again); Other Items
- We comment on multiple 2Q20 sector reports (e.g. Dow, Covestro, Croda, Sika and Repsol), discuss Dow and Covestro volume trends, and examine 2H outlooks from multiple chemical producers. Expectations remain optimistic.
- US polymer grade propylene (PGP) spot values reflect strength mid-week, and we flag the WoW downtick in US refinery operating rates as supportive. PGP spot (& contract) strength poses as a 2H20 margin headwind for buyers.
- Other items today range from the PTTGCA move to add NGL storage in the NE US, a move upwards in the Asia naphtha crack as demand returns, and US MTBE moving to Mexico by rail due to other logistical issues.
See PDF below for all charts